Investing in single-family rental properties can be a bit tough when it comes to saving up for the down payment. You’ll need at least 20% of the purchase price saved up, plus a little extra for closing costs, insurance, and repairs. Yet, don’t be distressed; there are some proven strategies to make saving up for your next investment property faster and so much simpler, and I’m pleased to help you look over those options more closely.
Quick Start to Saving for a Down Payment
One of the best ways to get started with saving money for your down payment is to prioritize saving over spending. Whereas it sounds like common sense, it can be daunting in practice.
Saving money can be quite challenging, primarily when it denotes putting off some of the things you really would like to buy. However, if you plan to save up a significant amount of money, it’s critical to plot specific goals, project a plan, and then fulfill it. Take into consideration automating your savings to make this process worry-free. Have your paycheck split between accounts, or set up automatic transfers.
If you aim to increase your savings, paying off any debts you may have is the best thing to institute. View it this way: Every month, you’re putting money towards paying off debts instead of saving for your future property. Once your debts are cleared, you’ll be shocked at how much more money you have left over at the end of each month.
No more worrying about debt and interest payments depleting your hard-earned income. If you do use credit cards, only spend what you can pay back each month. Some credit cards offer cashback rewards that will help you save still more; this can be a great advantage for responsible credit card users.
Assess the Cost of the Desired Property
To start off, research the real estate market in your chosen location to understand current property prices. Look into the type of property you want (particularly a single-family home, condominium, or multi-unit building) and what parts matter most to you (size, amenities, and location).
Once you’ve found a small number of potential properties, bring to mind their listing prices and any extra costs that come with buying a home, such as closing costs, taxes, and fees. Call to mind to think seriously about the potential ups and downs in the market and any unforeseen expenses that might befall during the buying process.
Always remember, it’s better to be equipped than surprised.
Set Reasonable Savings Goals
Putting together short-term goals is one of the best approaches to save up for a down payment. Instead of fixating on the large sum of money you need to purchase your next investment property, keeping your eyes on smaller, but highly attainable goals is better.
For instance, you can hit the ground running by planning to save a specific amount each week or each paycheck, even if it is just $25 or $50. By aiming at the short term, you can build your savings account and grow your sense of accomplishment.
Whatever you do to keep your savings on track will only benefit you and your investment portfolio moving forward.
Whether you have one investment property or a whole lot, Real Property Management Apex has a solution that’s attuned to your budget in Harker Heights and nearby. Contact us online or ring us at 254-732-1599 to be enlightened about our flexible management contracts today!
Originally Published on March 27, 2020
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